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How to Financially Survive a Disaster

This article was written by in Planning. 19 comments.


When one thinks of earthquakes in the United States, California is usually the main target. The San Andreas fault line is well-known for powerful quakes. There are others located within the United States that, although they haven’t caused severe seismic activity in the most recent century or two, could produce earthquakes resulting in severe damage. The New Madrid fault line in the mid-west, a fault line in South Carolina, and possibly most dangerously in terms of population, a fault line in New York City, are at risk for causing damage through earthquakes. The architecture at these locations is not as seismically designed as some architecture in California — where, in turn, the architecture is not as prepared for earthquakes as in Japan.

Damaging earthquakes in these regions of the United States other than along the San Andreas fault line are possible but not likely, so watch out for hype in the news media, an industry that is often quite happy to fan the flames of fear. Regardless of the probability, it might be worthwhile to develop an emergency plan so your finances have a better chance of surviving a disaster.

1. Have a passport. You never know when you’ll need to leave the country. In times of a national emergency, you may be able to leave without documentation, but having a passport will make this process easier at any time. My passport expired a few years ago, and I have the documentation to have a new one created. I’ve procrastinated setting up the appointment to have this process completed, but I don’t plan on waiting much longer. Receiving a passport can be a long process if you’re not interested in paying a fee for expedience.

2. Have a stash of cash at home. When financial advisers, professionals and amateurs, talk about emergency funds, they are usually referring to savings accounts at banks. There may be an emergency circumstance that prevents you from reaching this money in a timely manner. It might be helpful to keep a good amount of cash in your home, in an unlikely location to avoid the possibility of losing it during a robbery. Cash on hand is the first component of a comprehensive emergency fund.

3. Contact and account information for your insurance policies and bank accounts. You’ll want to have this information in a location you can easily grab if you have to run out the door, but not so convenient that it could fall into the wrong hands. Thinking ahead about the type of information you’ll need to have with you to survive a disaster as financially secure as you were before might lead you to the idea that it’s better to consolidate your financial accounts to keep it simple. This is my plan for the next few months. I’ve lost count of all my bank accounts, many of which I open to review for Consumerism Commentary. It’s time to consolidate and simplify.

4. Your wallet with ID and credit cards. You most likely have this already; make sure you grab it as you run out the door.

5. Keep gasoline in your car’s tank. In previous disasters, there have been problems getting gasoline. Gas stations run out, and people fleeing are sometimes forced to abandon their vehicles. Mass transit systems can break during the stress, as well. Having transportation ready to go in case of an emergency will help you get where ever you need to go.

What else do you need to ensure your finances will survive a disaster?

Published or updated March 15, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 19 comments… read them below or add one }

avatar shellye ♦107 (Cent)

Good article, Flexo. Another tool that could be useful is a “financial information sheet” that many life insurance companies provide their customers for free. It’s basically a one-page document that you can list all your bank accounts, insurance policies, etc. I think it’s primary use is to have all the information on hand in the event of your death (for your survivors) but having a second copy on hand to take in case of emergency would be helpful, too.

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avatar Ceecee ♦53 (Newbie)

This is some great common sense advice. I was in a small earthquake in Virginia, of all places. It lasted about two seconds, the plate we were on dropped and it was the loudest noise I’ve ever heard in my life. So, it can happen in other than expected places. I hope I can afford to keep the gas tank full!

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avatar krantcents

Good advice! I would add food and water. I was in the Northridge earthquake and electricity and water was out or unsafe for a period of time. The supermarkets ran out of certain items because deliveries were slowed down.

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avatar tbork84 ♦1,867 (Half-Dollar)

I bought a nice supply of emergency water to have on hand. A few weeks later I realized that my girlfriend had drank said emergency supply since it was “just sitting there”.

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avatar tigernicole86 ♦55 (Newbie)

I can definitely understand this. During hurricane Isadore, the winds and effects of it actually reached southern OH and did massive amounts of damage. I was one of the lucky ones who never lost power but the city of Dayton didn’t have power restored for nearly 2 weeks. We had to have cash saved up because the stores could only accept cash. We had friends doing laundry, showering, and trying to do some of their homework at our house, they just had to pay us money for gas to haul them around.

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avatar tigernicole86 ♦55 (Newbie)

I I would probably recommend that it should be items that do not need to be cooked like peanut butter and bread. In times of emergency, you may get tired of it but it won’t spoil quickly!

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avatar rewards ♦31 (Newbie)

“Receiving a passport can be a long process if you’re not interested in paying a fee for expedience.”

Might not be too bad right now. I dropped off my renewal application in the mail recently and received my new passport 17 days later.

“Contact and account information for your insurance policies and bank accounts.”

Even better, just have this information scanned and stored in an encrypted folder on a CD or USB stick. Make several copies and stash it at work, at the bank, with a relative, etc. One less thing to worry about.

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avatar 4hendricks ♦248 (Cent)

Definately food and water with long shelf life, can opener, paper goods, all of your account numbers, and estate planning docs, cash in small bills 1, 5, 10s gas tanks full.

I had never thought about a passport –

Now I just need to photocopy or scan all of our docs and account numbers to have.

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avatar gotr31 ♦224 (Cent)

I too would add food and water to the list. I also went and bought a kerosene heater this winter as we are in a climate with cold winters and no electricity would mean no heat.

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avatar squirrelers

Add long shelf life food, water, and medicines/health supplies to the list. In a crazy situation, with little available, who knows what lines you might have to wait in or how much you could be gouged for necessities.

I’d make sure you have funds accessible through different institutions if needed. Diversification can take different meanings beyond asset classes, and that includes diversifying by source of funds – even within the same class. For example, liquid funds at multiple locations might be helpful as opposed to concentrating all cash&equivalents at one institution.

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avatar Miss T @ Prairie Eco-Thrifter

Great advice. I would also add a food stash to the list. Grocery stores may be closed during this time too and you don’t want to starve. A first aid kit is also a good idea in case anyone gets injured.

Also add rechargeable batteries. You will need these to run things like phones, flashlights, etc.

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avatar Luke Landes ♦127,435 (Platinum)

Great ideas from everybody on food and water… essential parts of a disaster recovery plan.

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avatar Jason

Thanks so much for the article! It is very useful!

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avatar John

A disaster plan must be based on a realistic risk analysis. Identify the most likely and the most dangerous risks to your home and family, and take appropriate measures. I would suggest that in most parts of the US, a house fire is the most likely threat to a family’s safety. As such, stashing away a supply of cash and groceries is ineffective (since they’ll burn with the house), but having working smoke detectors, fire extinguishers, and an evacuation plan are essential mitigating factors. In the Southeast, a hurricane is a moderate threat, but usually you have advanced warning, so your disaster plan should be tailored to that. In other parts of the US, earthquakes, tornadoes, and tsunamis may occur with little warning. The disaster plan should account for the fact that in a major disaster, you may not be allowed back in your home for some time and you may only get out with the shirt on your back.

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avatar Pat S.

What do you guys think for how much in cash a family should keep on hand? I hesitate to have much at all around the house.

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avatar rewards ♦31 (Newbie)

$500 in a safe.

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avatar Cejay ♦1,521 (Half-Dollar)

Great article. I would add a stash of water, easy to eat/prepare food and some candles or alternative forms of lighting. We like to camp so we have camping supplies like our little stove and sleeping bags that have been used in the winter when the power has went out. With all the great suggestions I realize I need a stash of readily accesible cash.

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avatar skylog ♦368 (Nickel)

great article felxo! perhaps not the most thought of need, but i really appreciated the thought of the passport. mine has also been expired for a little over two years now, and i keep forgetting to get it taken care of. as for the time frame, i do not think it is too bad, although based on what i have heard from my local postal workers, the month or two before spring break is the worst time.

as others have added, i would certainly have, at the very least, a small stash of food and water available. after seeing some of the scenes from japan, one can never know how long it may be until food and water may become available.

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avatar tbork84 ♦1,867 (Half-Dollar)

That is one of the benefits of keeping a stocked pantry. If we really needed to stretch it, there is more than enough for a week or so of food available.

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